Eramet

the government of New Caledonia gives the green light to SLN's nickel ore exports

Paris, 16 April, 2019 (8:30 am - Paris time)

PRESS RELEASE

Eramet: the government of New Caledonia gives the green light to SLN's nickel ore exports

The government of New Caledonia today issued authorisations for Société Le Nickel exports for 4 million tonnes of nickel ore per year over a ten-year period. The increase in exports will be immediate with a target of 1.5 million tonnes as of 2019, and 4 million tonnes from mid-2020. These requests were sent in February by Eramet as part of the rescue plan announced at end- February 2019.

Eramet and its subsidiary, SLN, welcome this decision, which marks a crucial first step in implementing the plan to make SLN competitive in the long-term. This will bring benefits for employment, the environment and the region in a context of increased competition with the rise of new low-cost nickel producers.

SLN will be able to export its lower-grade nickel ore (1.8%), thereby more effectively leveraging its deposits. The 4 million tonnes of nickel ore exported should enable SLN to reduce its cash-cost by $0.60/lb by 2021^[1]. SLN supports this activity with a societal responsible approach in favour of the environment and the local populations, as part of the CSR roadmap set out with Eramet.

This positive decision is part of a three-pronged rescue plan that is expected to reduce SLN's cash-cost by $1.30/lb by 2021.

These export authorisations are a key step in the first lever, aimed at implementing a new rebalanced model for the two businesses, mining and metallurgy. This rebalancing makes it possible to move from mining exclusively for the plant to a better valorisation of the deposits thanks to exports of lower-grade ore unsuited to the local metallurgy transformation. The supply of high-grade ore to the Doniambo plant will continue.

After this decisive step forward, the Group is mobilised to implement the other two levers of the plan. On the one hand, improved operating performance particularly through reorganising the plant and working time at the mine, and, on the other, reducing energy price. As regards working time at the mine, three in four mining centres have already introduced the 147 hours a week scheme since January, with the fourth centre still on strike.

Christel Bories, Chairman and CEO of Eramet, commented:
« I would like to thank the government of New Caledonia and all the stakeholders who contributed to this decision. This is a sign of confidence in the successful implementation of the SLN rescue plan. We are strongly committed to working alongside SLN's teams to give the company a fresh impetus and to position it sustainably in creating value for its employees and for the region. »